The European Commission has approved Belgium's revised support measures aimed at extending the lifespans of two nuclear reactors: Doel 4 and Tihange 3. Initially set to be decommissioned by 2025 under the country's nuclear phase-out law established back in 2003, these reactors, which provide 2 GW of power, will now be allowed to operate for another decade. This decision came against the backdrop of growing energy security concerns, largely due to geopolitical tensions such as the war in Ukraine.
Belgium's federal government made the bold move to keep these two reactors operational until 2035. This was resolved through an official notification to the European Commission, detailing plans to establish “BE-NUC,” which is a joint venture equally owned by the Belgian State and Electrabel (ENGIE). The creation of this venture is primarily aimed at managing necessary capital expenditure related to the reactors' extended operation.
Part of the support structure includes the implementation of contracts-for-difference (CfD), intended to secure stable revenues for these nuclear plants over the subsequent decade, effectively limiting excessive earnings. The proposal also outlined protective financial mechanisms, including loans and cash flow guarantees, to bolster the overall reliability of operations.
Significantly, there are arrangements for transferring nuclear waste and spent fuel liabilities from Electrabel to the Belgian State, for which the state will receive €15 billion (approx. $15.7 billion). This move is indicative of the complex financial and structural arrangements necessary to facilitate the reactor extension.
The European Commission had initially expressed concerns about the repercussions of these arrangements, particularly whether they unduly favored the beneficiaries of these financial measures. Notably, the beneficiaries comprise not just Electrabel but also Luminus (a subsidiary of EDF S.A.) and BE-NUC itself, which will hold 89.8% of the reactors, compared to Luminus' 10.2% stake.
Belgium's public support plan has evolved with adjustments post-commission scrutiny. The country assured the Commission of the older technological design of its reactors, which limits their flexibility to adjust power output as required by the national nuclear safety authority.
To mitigate any market distortions, Belgium transferred decision-making authority concerning economic modulations to an independent energy manager. This entity will manage the sale of BE-NUC's nuclear electricity, thereby ensuring competitive tender processes every 3.5 years, particularly to guard against unbalanced competition involving Engie's trading divisions.
Between the contract-for-difference mechanisms and additional financial safety nets, Belgium has attempted to solidify the project's long-term viability. This includes the stipulation of conditions like the modification of strike prices based on discounted cash flow models and market price risk adjustments, alongside capped operating cash flow guarantees.
While the Commission concluded the support measures are necessary, appropriate, and adequately proportionate to minimize competition distortions, this progressive step raises significant questions about Belgium's future nuclear policy, particularly in light of its earlier intentions to phase out nuclear power completely.
With the move to extend the lives of Doel 4 and Tihange 3, Belgium steps boldly away from its previous commitments, raising eyebrows across Europe, especially as countries grapple with energy security and climate change impacts.
What remains to be seen is how this decision will shape Belgium's energy future and its commitment to renewable energy alternatives amid the global call for decreased dependency on fossil fuels and cleaner energy resources.